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Posted on March 31, 2017

With healthcare reform stalled, Sen. Lamar Alexander announced Wednesday he intends to file legislation that would provide temporary relief for millions of people who live in areas where there are no insurers selling policies on the federal health insurance marketplace.

Alexander’s proposal would let people who get government subsidies to buy insurance use that money to purchase any state-approved plan on the private market if there is no insurer selling policies on the federal exchange, or marketplace, in their area.

Right now, the subsidies can be used only to buy a policy on the exchanges, which were set up under the Affordable Care Act, or Obamacare.

Alexander’s bill also would remove the tax penalty for failing to buy a policy if Americans who receive federal subsidies have zero options on the exchanges. That fine can total as much as $2,000 for a family of four.

The legislation offers “a very simple solution to an emergency that’s bound to exist in many states,” said Alexander, the Tennessee Republican who serves as chairman of the Senate Health, Education, Labor and Pensions Committee.

But, “this is not a permanent solution,” he said. “Congress has a responsibility to continue its work to solve this problem and to give Americans more choices of lower-cost health insurance.”

If approved, the legislation would remain in effect through 2019.

Alexander’s effort to provide emergency relief for Americans struggling to buy insurance follows the collapse last week of GOP efforts in the House to repeal and replace the Affordable Care Act.

House Speaker Paul Ryan and other GOP leaders canceled a vote on their healthcare replacement bill last Friday after the legislation failed to attract the support of hardline conservatives and some moderates in their own party and was headed for certain defeat.

This week, House Republicans said they are continuing to negotiate a healthcare bill to repeal most of the regulations put in place under Obamacare.

But Alexander said Congress must act now to help the Tennesseans – “some of the most vulnerable citizens in our state” – and millions of other Americans who are likely to have zero choices for insurance in 2018.

“I think we have an obligation to continue to move ahead,” he said.

Some 11 million Americans buy insurance through one of the Obamacare exchanges, and 85 percent of them get a government subsidy to make the premiums more affordable.

In Tennessee, 230,000 people buy insurance on the exchange. But in many areas, choices are limited because there are few, if any, providers participating in the exchange. State Insurance Commissioner Julie Mix McPeak has warned that the exodus of insurers in Tennessee has left the Obamacare exchange near collapse.

The insurance giant Humana, the sole provider on the federal exchange in the Knoxville area, has announced it will exit the market in 2018, leaving 40,000 people who buy insurance on the exchange with zero health insurance options next year.

Of those 40,000 enrollees, 34,000 receive federal subsidies to help pay for their insurance.

“When no one sells insurance on the exchange, having an Affordable Care Act subsidy is like having a bus ticket in a town where the buses don’t run,” Alexander said. “This will provide some temporary bus service for the next two years.”

Nationwide, 7 percent of counties had just one insurer offering plans on the Obamacare exchanges in 2016. This year, that number jumped to 32 percent.

This year, five states – Alabama, Alaska, Oklahoma, South Carolina and Wyoming – have just one insurer offering plans on the exchanges in the entire state.

“Next year, in 2018, we know the problem will be much worse,” Alexander said.

Alexander said Congress must act within the next few weeks because insurers need to get state approval for their rates for 2018.

“To do that, they are telling us they need to know around the end of April what the rules of the game are,” he said.

McPeak, the Tennessee insurance commissioner, said the legislation “would definitely be helpful for Tennessee consumers.”

“We are in favor of any legislation that improves consumer choice and provides access for Tennesseans,” she said. “It is completely unacceptable for our consumers to have a subsidy but no ability to purchase insurance on the exchange. We support any option that avoids that result.”

Sen. Bob Corker, R-Tenn., is cosponsoring the legislation.

“At some point, on behalf of the American people, Congress and the administration have to resolve the issues that are driving up health care costs, limiting choices and causing the exchange market to spiral downward,” Corker said.

“However, in the interim, we must take steps to ensure people in places like Knoxville, where more than 34,000 individuals receiving subsidies under current law will have zero options in 2018, have the opportunity to purchase health insurance off the exchange in the individual market.”